A bout of volatility was witnessed as key benchmark indices weakened once again in morning trade as weakness in Asian stocks dampened sentiment. The S&P BSE Sensex was down 93.63 points or 0.46%, up about 40 points from the day's low and off close to 45 points from the day's high. The market breadth, indicating the overall health of the market, was weak.
Bank stocks extended initial losses after the Reserve Bank of India (RBI) on Tuesday, 23 July 2013 announced more measures to squeeze liquidity from the banking system to stem rupee's decline. Pharma stocks edged higher on defensive buying. Interest rate sensitive realty stocks edged lower as RBI's latest measures to tighten liquidity in the banking system to stem rupee's slide have virtually wiped off possibility of any downward revision in RBI's key policy rate viz. the repo rate at its first quarter review of Monetary Policy 2013-14 on 30 July 2013.
The market trimmed losses after a weak start. The intraday recovery proved short lived as the market weakened again in morning trade.
The market may remain volatile in the immediate future as traders roll over positions in the futures & options (F&) segment from the July 2013 series to August 2013 series. The near month July 2013 derivatives contracts expire tomorrow, 25 July 2013.
At 10:20 IST, the S&P BSE Sensex was down 93.63 points or 0.46% to 20,208.50. The index fell 137.46 points at the day's low of 20,164.67 in early trade, its lowest level since 22 July 2013. The index declined 49.43 points at the day's high of 20,252.70 in morning trade.
The CNX Nifty was down 53.10 points or 0.87% to 6,024.70. The index hit a low of 6,022.30 in intraday trade, its lowest level since 22 July 2013. The index hit a high of 6,047.25 in intraday trade.
The market breadth, indicating the overall health of the market, was weak. On BSE, 755 shares declined and 373 shares rose. A total of 47 shares were unchanged.
Among the 30-share Sensex pack, 15 stocks rose and rest of them fell. Maruti Suzuki India (down 2.6%), Sterlite Industries (down 2.13%) and HDFC (down 1.84%), edged lower.
Bank stocks extended initial losses as the RBI's latest measures to squeeze liquidity from the banking system to stem rupee fall have made it costlier for banks to raise short term funds. ICICI Bank (down 3.76%), HDFC Bank (down 3.23%) and State Bank of India (down 2.52%), edged lower.
The Reserve Bank of India took new steps on Tuesday to support the rupee, signalling it will stay the course with its defence of the currency despite the risks to economic growth. The central bank tightened liquidity further and made it even harder for lenders to access funds with measures including lowering the amount banks can borrow or lend under its daily liquidity window. The RBI lowered the overall limit for borrowing under the daily liquidity adjustment facility (LAF) -- which offers funds in exchange for collateral -- for each bank to 0.5% of deposits from 1%. The central bank also said banks now needed to maintain 99 percent of their daily cash reserve ratio requirements -- the deposits they must set aside -- with the RBI, compared with 70% now. The change takes effect from the two-weekly period starting July 27. The RBI also announced the sale of short end cash management bills of Rs 6000 crore to drain out more cash from the banking system.
Yes Bank fell 8.07% ahead of Q1 results today, 24 July 2013.
Interest rate sensitive realty stocks edged lower as RBI's latest measures to tighten liquidity in the banking system to stem rupee's slide have virtually wiped off possibility of any downward revision in RBI's key policy rate viz. the repo rate at its first quarter review of Monetary Policy 2013-14 on 30 July 2013. HDIL (down 4.22%), DLF (down 3.67%), Unitech (down 2.89%), Sobha Developers (down 1.82%) and D B Realty (down 1.77%), edged lower.
Pharma stocks edged higher on defensive buying. Cipla (up 0.37%), Ranbaxy Laboratories (up 0.5%), Dr Reddy's Laboratories (up 1.17%), Lupin (up 1.38%), and Sun Pharmaceutical Industries (up 1.59%), edged higher.
Wockhardt (down 13.49%), IndusInd Bank (down 8%), IDFC (down 6.11%) and Axis Bank (down 5.34%), were among the major losers from the BSE's 'A' group.
Andhra Pradesh Paper Mills advanced 1.81% after the company reported net profit of Rs 8.13 crore in Q1 June 2013 as compared to net loss of Rs 15.81 crore in Q1 June 2012. Net sales rose 37.4% to Rs 256.32 crore in Q1 June 2013 over Q1 June 2012.
KPIT Cummins Infosystems lost 1.2% as the company's EBITDA margin dropped by 197 basis points on sequential basis to 15.86% in Q1 June 2013. KPIT Cummins Infosystems' consolidated net profit surged 17.5% to Rs 60.13 crore on 7.6% growth in revenue to Rs 613.21 crore in Q1 June 2013 over Q4 March 2013. Net profit margin expanded by 83 basis points (bps) quarter on quarter (QoQ) to 9.81% in Q1 June 2013.
Asian stocks fell on Wednesday, 24 July 2013, after a private survey showed manufacturing weakened further in July in China. Key benchmark indices in China, Hong Kong, Indonesia, Japan, and Taiwan were down by 0.28% to 1.27%. Key benchmark indices in Singapore and South Korea rose by 0.1% to 0.24%.
China's manufacturing weakened further in July, signaling the worst of the nation's slowdown has yet to be reached, according to a preliminary survey of purchasing managers. The reading of 47.7 for an index released today by HSBC Holdings Plc and Markit Economics, was less than estimated and if confirmed in the final report Aug. 1, would be the lowest in 11 months. Readings below 50 indicate contraction.
Japan's exports rose for a fourth straight month in June as a weak yen made the nation's products more competitive and shipments to the European Union rebounded. Exports gained 7.4% from a year earlier, the Finance Ministry said in Tokyo today.
Trading in US index futures indicated a flat opening of US stocks on Wednesday, 24 July 2013. US stocks ended mostly lower on Tuesday after a decline in a regional manufacturing gauge prompted concern, but the Dow Jones Industrial Average climbed to a record close. The Federal Reserve Bank of Richmond said manufacturing activity in the central Atlantic region weakened.
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